Exhibit No. 4(b)
SUB-ADVISORY CONTRACT
Contract made as of July 23, 1987 between PAINEWEBBER INCORPORATED
("PaineWebber"), a Delaware corporation registered as a broker/dealer under
the Securities Exchange Act of 1934 and as an investment adviser under the
Investment Advisers Act of 1940 and XXXXXXXX XXXXXXXX ASSET MANAGEMENT INC.
("Xxxxxxxx Xxxxxxxx"), a Delaware corporation registered as an investment
adviser under the Investment Advisers Act of 1940 and a wholly-owned
subsidiary of PaineWebber;
WHEREAS, PaineWebber wishes to retain Xxxxxxxx Xxxxxxxx as
sub-adviser to provide certain investment advisory services to PaineWebber in
connection with PaineWebber's services as investment adviser to PaineWebber
Cashfund, Inc. (the "Fund"), an open-end, diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, Xxxxxxxx Xxxxxxxx is willing to render such sub-advisory
services as described herein to PaineWebber upon the terms and for the
compensation set forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, it is agreed between the parties as follows:
1. Appointment. PaineWebber hereby appoints Xxxxxxxx Xxxxxxxx its
sub-adviser and Xxxxxxxx Xxxxxxxx accepts such appointment and agrees that it
will furnish the services set forth in paragraph 2 below.
2. Services. Subject to the supervision of the Fund's board of
directors, Xxxxxxxx Xxxxxxxx will provide a continuous investment program for
the Fund's portfolio, including investment research and management with
respect to all securities and investments and cash equivalents in the
portfolio. Xxxxxxxx Xxxxxxxx will determine from time to time what securities
and other investments will be purchased, retained or sold by the Fund,
Xxxxxxxx Xxxxxxxx will provide the services under this Contract in accordance
with the Fund's investment objective, policies and restrictions as stated in
the Fund's current prospectus. Xxxxxxxx Xxxxxxxx further agrees that it:
(a) will conform with all applicable rules and regulations
of the Securities and Exchange Commission;
(b) will place orders pursuant to its investment
determinations for the Fund either directly with the issuer or with
any broker or dealer. In placing orders with brokers and dealers
Xxxxxxxx Xxxxxxxx will attempt to obtain the best net price and the
most favorable execution of its orders. Consistent with this
obligation, when the execution and price offered by two or more
brokers or dealers are comparable, Xxxxxxxx Xxxxxxxx may, in its
discretion, purchase and sell portfolio securities to and from
brokers and dealers who provide the Fund with research, advice and
other services. In no instance will portfolio securities be purchased
from or sold to PaineWebber, Xxxxxxxx Xxxxxxxx, Provident
Institutional Management Corporation ("PIMC") or any affiliated
person
thereof except in accordance with the rules and regulations
promulgated by the Securities and Exchange Commission pursuant to the
1940 Act.
(c) will maintain all books and records with respect to the
Fund's securities transactions and will furnish the Fund's board of
directors such periodic and special reports as PaineWebber or the
Fund's board may request.
3. Services Not Exclusive. Xxxxxxxx Xxxxxxxx' services hereunder are
not deemed to be exclusive, and Xxxxxxxx Xxxxxxxx is free to render advisory,
administrative or other services to other funds or clients so long as Xxxxxxxx
Xxxxxxxx' services under this Contract are not impaired thereby.
4. Books and Records. In compliance with the requirements of Rule
31a-3 under the 1940 Act, Xxxxxxxx Xxxxxxxx agrees that all records it
maintains for the Fund are the property of the Fund and further agrees to
surrender promptly to the Fund any such records upon the Fund's request.
Xxxxxxxx Xxxxxxxx agrees to maintain for the Fund the records the Fund is
required to maintain under Rule 31a-1(b)(1) (but limited to maintaining
original confirmations of purchase and sales of securities showing for each
such transaction the name and quantity of securities, the unit and aggregate
purchase or sale price, commission paid, the market on which effected, the
trade date, the settlement date, and the name of the person through or from
whom purchased or received or to whom sold or delivered) and the records the
Fund is required to maintain under Rule 31a-1(b)(5), (6), (9) and (10) and to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the
records it maintains for the Fund.
5. Expenses. During the term of this Contract, Xxxxxxxx Xxxxxxxx will
pay all expenses incurred by it in connection with its services under this
Contract.
6. Compensation. For the services provided and expenses assumed
pursuant to this Contract, effective the date of this Contract, PaineWebber
will pay Xxxxxxxx Xxxxxxxx and Xxxxxxxx Xxxxxxxx will accept as full
compensation a fee, computed daily and paid monthly, at the following annual
rates of the Fund's average net assets:
Fund's Average Fee As %
Net Assets of Fund's Average
In Billions Net Assets
-------------- -----------------
Up to $500 million.............................. .090
In excess of $500 million up to $1.0 billion.... .050
In excess of $1.0 billion up to $1.5 billion.... .040
In excess of $1.5 billion up to $2.0 billion.... .030
In excess of $2.0 billion up to $2.5 billion.... .025
In excess of $2.5 billion up to $3.5 billion.... .025
In excess of $3.5 billion up to $4.5 billion.... .020
In excess of $4.5 billion up to $5.5 billion ... .0125
Over $5.5 billion............................... .010
7. Limitation of Liability. Xxxxxxxx Xxxxxxxx will not be liable for any error
of judgment or mistake of law or for any loss suffered by PaineWebber or by
the Fund or its
2
shareholders in connection with the performance of this Contract, except a
loss resulting from willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or from reckless disregard by it of its
obligations or duties under this Contract.
8. Duration and Termination. This Contract will become effective upon
the date hereabove written and, unless sooner terminated as provided herein,
will continue in effect for two years from the above written date. Thereafter,
if not terminated, this Contract will continue automatically for successive
periods of 12 months each, provided, such continuance is specifically approved
at least annually (a) by a vote of a majority of those members of the Fund's
board of directors who are not parties to this Contract or interested persons
of any such party, cast in person at a meeting called for the purpose of
voting on such approval, and (b) by the Fund's board of directors or by vote
of a majority of the outstanding voting securities of the Fund.
Notwithstanding the foregoing, this Contract may be terminated by either party
hereto at any time, without the payment of any penalty, on 90 days' written
notice to the other party, and will be terminated automatically upon any
termination of the Investment Advisory, Administration and Distribution
Contract between the Fund and PaineWebber. In addition, notwithstanding the
foregoing, this Contract may be terminated by the Fund at any time, without
the payment of any penalty, by vote of the Fund's board of directors or by
vote of a majority of the outstanding voting securities of the Fund on 60
days' written notice to Xxxxxxxx Xxxxxxxx.
9. Amendment of This Contract. No provision of this Contract may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment of this Contract shall be
effective until approved by vote of the holders of a majority of the Fund's
outstanding voting securities.
10. Miscellaneous. The captions in this Contract are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be
affected thereby. This contract shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by Delaware law.
3
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
PAINEWEBBER INCORPORATED
Attest
/s/ Xxxxxxx X. Xxxxxxx By /s/ Xxxxxx X. X'Xxxxxxx
----------------------------- ----------------------------------
XXXXXXXX XXXXXXXX ASSET MANAGEMENT INC.
Attest
/s/ Xxxxxxx X. Xxxxxxx By /s/ Xxxxx X. Xxxxxx
----------------------------- ----------------------------------
4
